I just got back from a weeklong trip to Charleston, South Carolina for my employer. As someone who travels for work on a regular basis, I am ever mindful of the expenses that I incur for transportation, hotels, meals, and the dozens of little purchases that add up. Then there’s the salary that I am earning while on business travel, something that my employer is required by law to provide.
Very often, I wonder how many expense reports, like mine, my employer gets on a regular basis. After all, many of my colleagues travel around the world, attend industry events, and must be on the road for a significant portion of their job responsibilities. From the employer standpoint, how much of this time and expense is legally compensable?
Let’s take a closer look at the rules on travel time compensation, with some tips on reducing the costs for a more mobile workforce.
Guidelines for Paying Employees for Travel Time
The number one question that comes up when thinking about travel compensation is “ Do I have to pay employees for travel time?” The short answer is “Yes”. According to Nolo.com, a publisher of legal guides since 1971, employers are responsible for paying for travel time that is officially part of an employee’s job duties. If an employee must travel after the normal work shift (for example to respond to a customer’s urgent request or purchase something required for the business) this time is compensable.
Anytime an employee must travel for business related purposes, all of the time should be compensated. This can get tricky. Employees may not be able to clock in and out of an onsite attendance system, therefore they must track their own time. This time can include travel on a public system, such as an airline, train, or bus. They may choose to drive, so this time is also considered work travel. However, if the employee chooses to visit friends, go shopping, or travel for other personal reasons – this time is not to be included in their compensation. The rule on travel compensation is not to be confused with regular commute time to and from a job.
As for time compensation during travel, the rules for overtime still apply. In some cases, an employer may choose to offer ‘comp’ time off when a salaried employee exceeds a certain amount of time worked during one payroll period. However, the employer may not substitute this for standard overtime for hourly employees.
Other items that are normally part of travel compensation include:
- Hotel fees (out of pocket)
- Meals (Per diem limits)
- Business needs (office and event supplies, required books, etc.)
- Client related expenses (meals, entertainment, etc.)
- Gas (rental and personal vehicle) and mileage (personal vehicle)
- Tips and gratuities (again with limits set)
Keeping Travel Compensation Under Control
The main reason for defining travel compensation is to attempt to control the costs associated with this business necessity. It’s important to note that the human resource department is ultimately responsible for communicating a clear travel policy for employee travel, with guidelines that make it easy for employees to comply.
Here are some ways to accomplish this…
- Add a travel policy to the corporate employee handbook
Every company that requires travel for employees needs a travel policy inked into the corporate handbook. This policy doesn’t have to be elaborate. It can be as simple as providing instructions about how to book travel, certain limits on daily costs for meals, tips and other compensable expenses, as well as letting employees know how to log their travel time for payroll. - Work with a travel vendor to set limits on expenses
To make your life easier as an HR or payroll manager, find a travel vendor who can give you access to lower cost travel services. This can help to set limits on things like airfare, hotels, and car rentals from the start. Many vendors have access to industry-reduced fees and special rates for booking these travel needs together. - Assign a member of the HR team to review travel expenses
As part of responsible business practices, it’s important to have at least one member of your HR team well versed in the travel policy to go over expense reports with a keen eye. This person can be your travel advisor too if expense or time related questions come up while an employee is engaged in a work related trip. - Educate employees on ways to reduce travel costs
Make your employee policy as comprehensive as possible by using this as an opportunity to educate. Give pointers on ways to cut down on hidden travel fees, such as packing light (no checked baggage), using meal discount programs, and limiting last-minute changes to flights or hotel rooms.
Got a question about travel compensation rules? The Office of Personnel Management has a great general outline of a travel compensation policy and details on the employment laws behind this.
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